Talos Energy has announced the execution of a definitive agreement to jointly acquire certain deepwater assets in the Gulf of America from Shell Offshore Inc., alongside an affiliate of Ridgewood Energy Corporation, for cash consideration of $850 million (net to Talos), subject to customary purchase price adjustments. Talos expects its final net cash consideration to be approximately $450 - $500 million(1), based upon estimated interim cash flow from the acquired assets from the July 1, 2025 Acquisition effective date.
Strategic Rationale:
- Enhances Scale with Significant Financial Accretion: Adds low-cost, high-margin, oil-weighted production and is expected to be immediately accretive to key financial metrics.
- ?Increases Reserves and Production with Future Development Upside: Adds proved reserves of approximately 23 million barrels of oil equivalent ("MMBoe") and 10 MMBoe of probable reserves, with additional operated Infrastructure-Led Exploration (ILX) opportunities supporting future growth. Production for the first quarter 2026 was 16 thousand barrels of oil equivalent per day ("MBoe/d"), ~77% oil.
- Maintains Balance Sheet Strength and Financial Flexibility: The transaction is expected to be funded through a combination of cash on hand and debt, allowing Talos to maintain a strong balance sheet and leverage profile consistent with its disciplined capital allocation framework.
Talos President and Chief Executive Officer Paul Goodfellow commented, 'We are pleased to announce the acquisition of these high-quality deepwater assets directly aligned with Pillar Two of our strategy. The bolt-on is highly accretive, materially enhances free cash flow, and includes Infrastructure-Led Exploration opportunities where our field life extension track record can unlock value beyond current reserves. We also see a clear pathway for operated development activity to compete for capital beginning in 2027, further supporting long-term value creation as we continue to advance our strategy to build a long-lived, scaled portfolio and become the leading pure-play offshore E&P.'
GULF OF AMERICA BOLT-ON ACQUISITION
The acquired assets include a 50% working interest and operatorship in the Coulomb field owned exclusively by Shell and a 25% non-operated working interest in the BP-operated Na Kika platform and four associated fields, including Kepler, Ariel, Fourier, and Herschel. Upon executing definitive agreements, Talos provided a deposit of $42.5 million in escrow, to be credited at close. Based upon estimated interim cash flow from the acquired assets from the July 1, 2025 Acquisition effective date, Talos expects its final net cash consideration to be approximately $450 - $500 million(1), excluding the deposit. The working interests in the BP-operated Na Kika platform and associated fields are subject to a 30-day preferential right by affiliates of BP, which, if exercised, would result in Talos only acquiring a 50% working interest and operatorship in the Coulomb field.
First quarter 2026 average production for the interests Talos is acquiring was approximately 16 MBoe/d (~77% oil). The acquired assets include approximately 23 MMBoe of proved reserves and probable reserves of 10 MMBoe, based on NSAI SEC year-end 2025 reserves report, net to Talos and net of P&A.
Other commercial terms of the agreement include a 50% upside sharing agreement effective at closing through year-end 2027 subject to commodity-price-based thresholds if realized price exceeds $60/Bbl as well as certain other contingencies and agreements.
The Acquisition is expected to close by the end of 2026, subject to customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the expiration of applicable preferential purchase rights with respect to applicable Na Kika interests.
TRANSACTION FINANCING
The Company expects to fund the Acquisition through a combination of cash on hand and debt. In connection with the transaction, Talos has secured $150 million of incremental commitments from its existing lenders, increasing the Company's borrowing base from the current $700 million to $850 million, subject to and effective upon closing the Acquisition.
Talos Executive Vice President and Chief Financial Officer Zach Dailey added, 'This strategic transaction in the Gulf of America is expected to be immediately accretive to key financial metrics and deliver long-term value while maintaining balance sheet strength and preserving financial flexibility. Importantly, the increased borrowing base reflects strong confidence from our lenders in the quality of the acquired assets, Talos's base business, and the financial framework that underpins our strategy. On a pro forma basis, we expect to maintain leverage consistent with our financial framework.'
OPERATIONS UPDATE AND 2026 GUIDANCE
The Company successfully completed the Genovesa workover and returned the well to production late in the second quarter of 2026, consistent with its previous guidance.
As recently announced by the operator, the first Monument development well was successfully drilled to its total measured depth of 32,250 feet and encountered 245 feet of net pay confirming pre-drill expectations. Drilling is set to commence on the second development well followed by completion operations on both wells. First oil is expected by late 2026.
The Company expects to update its 2026 operating and financial guidance for the Acquisition following closing.
ADVISORS
Greenhill, a Mizuho affiliate, served as exclusive financial advisor to Talos on the Acquisition.
Footnotes:
(1) Assumes estimated closing date of September 1, 2026.
Source: Talos Energy
